Kuala Lumpur – Natural rubber (NR) demand is set for a 2.6% increase in the three months to end of October, following seven months of consecutive declines, according to the latest data by the Association of Natural Rubber Producing Countries (ANRPC).
The trend will primarily be driven by US economic revitalisation initiatives and by demand from China, which emerged from Covid-19 downturn with a 3.2% second quarter growth in economy, said ANRPC in its monthly NR update published 6 Aug.
Following the 'earlier-than-expected' recovery, China has scaled up its outlook on the consumption of NR for 2020 to 5.043 million tonnes from 4.930 million tonnes a month ago, ANRPC said.
However, with increasing preference towards the use of nitrile rubber gloves for Covid, Malaysia has scaled down its demand outlook to 522,000 tonnes from 603,000 tonnes reported last month.
As a result of the revisions, ANRPC’s outlook for 2020 demand is marginally up at 12.754 million tonnes from 12.668 million tonnes anticipated a month ago. The revised outlook represents a 7.3% decrease from the previous year.
During the first six months of the year, NR demand fell 15% to 5.91 million tonnes, according to ANRPC data.
The outlook for NR production remained unchanged at the end of July, with full year output estimated to decline 4.5% to 13.195 million tonnes in 2020.
In the first six months of the year, the global production of NR fell 6.8% to 5.670 million tonnes, and ANRPC expects a further 2.4% decline in production during the four months to end of October.